The Way Companies Use Content Is Changing Rapidly

In just a few short years, New York based syndication startup
NewsCred has gone from
serving mostly publications to increasing revenue 11 fold and
growing customers by 570 percent by providing, curating, and
customizing content for the world's biggest brands in the rapidly
growing practice of content marketing.

The company,
founded by Shafqat Islam, Iraj Islam and Asif
Rahman, was validated today, as was the field of content
marketing in general, by a $15 million Series B round of funding
from Mayfield
Fund and Greycroft Partners, and by the fact that they've
signed The
New York Times as their newest content partner, joining over
2,500 others including Bloomberg,
The Guardian, and The Economist.

This
represents a huge change in how media and content are used and
consumed. There used to be a direct line between publisher and
reader. Now, content is available from a massive variety of
sources, and often isn't accessed by going directly to a
provider's home page, but through social media.

Increasingly, the source is
from brands that are looking to create online audiences and keep
them engaged. As NewsCred CEO Shafquat Islam told us,
"All of these brands have acquired these massive audiences at
scale. Over the few years they've acquired these huge audiences
that are direct relationships through Facebook
or Twitter or email, their website or their apps, and they need
something to say."

And having put years into
building technology, licensing, and content partners, NewsCred
had the quality and volume of material, and was well positioned
to help brands do that at scale. Brands use content to attract
people to their website, engage socially, and drive email
engagement.

It's not the size of the
funding alone that makes it clear that investors are excited
about content marketing, but the source. Part of the company's
first round, raised about year and a half ago, came from
FirstMark, known for making contrarian bets. Content marketing's
not contrarian anymore.

The Mayfield Fund was a
principal investor in Marketo, a marketing automation company
which appears to be headed
towards an IPO. Rajeev Batra, a partner at the fund who is on
Marketo's board will be joining NewsCred's board as
well.

Greycroft was a large investor in Buddy Media, which recently
sold to Salesforce
for $689 million. These are both funds that made large and
successful bets on digital marketing companies. And now they're
looking to content marketing.

When marketers are spending 25 to 30 percent of their budgets on
content, investors start to perk up. According to Islam, the
round only took two to three weeks to put together, which speaks
to investor's eagerness.

"Social publishing has the Buddy Medias of the world and
that has already developed. There's media monitoring and that's
already developed. Email is already developed and there's big
players. For marketing automation, there's Marketing and Eloqua,"
Islam says. "Content marketing, it was still wide open for the
taking, and I guess investors wanted to bet on the one that they
thought would lead them and take that market. "

And as exciting as bringing The
New York Times on board is from a content perspective, the
symbolism might mean even more.

"This deal was years in the making," Islam said. "And I
think its a big statement that content marketing as a category
has really evolved when large and mainstream publishers, and the
New York Times is among the largest most reputable ones, are
actually looking at software partners like NewsCred to help them
figure out that space."

It's the difference between just adding another syndication
partner, and finding a partner that can help them access an
entirely new and unfamiliar market.

Media's a difficult business to be in, and even companies as well
regarded as The New York Times need to figure out digital models
that are sustainable in the long run. Figuring out new ways to
distribute and make money off their content is a large part of
that.

"Our investors are basically
saying that 'we believe in premium content,' Islam says. "This
money, I almost feel like we raised it on behalf of the content
partners we work with, because it will allow all of us together
to reach new audiences and generate new
revenue."

As for what they'll do with the funding, the company wants
to grow internationally, Islam says. While content marketing is
pretty evolved in the US, the UK, Europe, and Japan are about
year behind. And so, to grow in those markets, the company needs
to license content in every language.

The second part is the move towards integrating with other
marketing and software tools to make NewsCred's content
"ubiquitous in the entire marketing ecosystem" so its as easy as
possible for brands to do interesting and innovative things with
what the company provides.

Some argue that using content in this way somehow devalues it or
renders it inauthentic. If that's the case, people simply ignore
it, and companies won't see results. And if companies are
misleading about where content comes from, they're likely to see
significant backlash.

The amount companies are spending makes the case that if used
carefully, content marketing has significant potential, as does
the eagerness of media companies to get involved.